PACS:
1. n. (acronym)Picture Archiving and Communications System. A device or group of devices and associated network components designed to store and retrieve medical images.
2. n. (acronym)Pain And Constant Suffering.

Monday, May 31, 2010

I've been a little busy lately, which is my way of saying I haven't gotten around to blogging anything for a while. My daughter graduated from college last week, and I've been working straight through this past weekend. Thus, there has been little time for amusement. To top it off, the Dalai family is shortly headed out to points south, and IF I can find internet service (doubtful) I might post from a wonderful exotic location somewhat removed from my usual stomping grounds.

Messages from points VERY far South, Western Australia, indicate some minimal movement on PACS problems. I hope to have a full report eventually. I'm still on the schedule for RANZCR in October, assuming I don't get stopped at the airport and turned away for my seditious activities in patient care. What a story that would make! One point I need to make: I am NOT in the employ of ANY PACS company. None. Whatever antipathy I have toward certain larGE and AGraFAting companies is borne of my daily use of their products. Period.

I am scheduled to travel to Chicago soon to meet with the brass at Merge Healthcare, and a full report will follow. My rendition of THE CALL from Merge seems to have disturbed some of my readers, and they are assuming I have "drunk the Kool-Aide". Again, nothing could be further from the truth. I am certainly willing to be fair, and listen to what Merge has to say, and I will relay that back to you. Rest assured, as a physician, a radiologist, my duties are first and foremost to my patients, and not to any company. I will be carefully monitoring the way in which our system is serviced and upgraded. If Merge fulfills their promises in this regard, and especially if they don't, you will be the first to know. I can only hope and expect (and to avoid the wrath of my partners who spent a lot of money on an AMICAS installation, I can also pray) that Merge will come through, maybe even with flying colors.

Monday, May 17, 2010

Dalai's note: As I noted, Mike Cannavo, the One and Only PACSMan, was in on the call with Merge as well. Here is his take:

As the Dalai indicated “The Call” was interesting both in its timing and content. After hearing what was said, though, I felt like the kid who finally realizes there in no Easter Bunny or Santa Claus- you sorta knew all along what was going on but now had to face the realization that your hunch was right all along. Interestingly, the reverence shown for “Michael” (a.k.a. Mr.. Ferro) was nothing short of what would be given to the Pope or others held in esteem by the Roman Catholic Italian community. I was waiting for his ring to be kissed and him being addressed as the Holy Father or Godfather, but I guess that’s what happens when you are part of the core team that helped his former company be sold for $300M- the line between man and Superman tends to blur. Pulling off this deal as well some might indeed call him Superman- he earned my respect just pulling the deal off however he managed to do it- but in the end he puts his pants on in the morning just like I do. Honestly though, most days I work from home in gym shorts and a tee shirt while he gets dressed up so I guess that’s what differentiates his role in the business world from mine- that and a few million per year in salary and other perks. Minor details…

Initially the Dalai and I were told that not just Kurt and Nancy would be on the call but Paul Merrild, Merge’s new (and AMICAS’ old) Executive VP of Marketing, Justin Dearborn, Merge’s CEO, and perhaps a few others who were invited as well. I guess we either didn’t rate highly enough or they were too busy to deal with lowlife’s like us, but either way it was just a cozy chat among the four of us without the big(ger) Kahuna’s listening in . (Side note: Merge also needs to get with Yahoo Finance because Nancy is still listed with her old title as are many of the “old” players).

It doesn’t take much for the Dalai to get excited, being a married man of 25+ years or so, but after seven years of being divorced and dating way too many women with ambitious- or as I prefer to view it, grandiose- plans I’m a lot more skeptical of anyone with plans like those Merge outlined for the company. Let’s pick out my engagement ring after the second date. Umm…let’s not and say we did. Certainly keeping everything and merging it into one product would be the best of all worlds and makes sense, but keeping the company alive and financially viable until this is actually done will be an incredible challenge, especially given both companies lack of positive cash flow and the significantly increased debt load. Also keep in mind after two extensions Merge still only sold <92% of the available stock so….

I’m not sure I completely agree with Dalai that Merge was brought back from death’s door. Yes, the stock did hit the $0.20 range after being investigated by the SEC among others (from a high of $28.00 or so) but after nearly three years the patient still has quite a bit of rehab to go before they can be discharged, especially since it the stock still languishes in the low to mid $2.00 range since the sale to AMICAS went through (it’s in the mid $2.30’s as I write this).

Much of what was in “the call” outlined for us makes sense for a bigger company but it remains to be seen if it makes sense for a company the size of Merge, even the “new” Merge. AMICAS could have taken the Emageon VNA components and done something with then but they elected not to. For that matter Emageon could have done the same themselves and elected not to. I’m not sure what Merge suddenly sees in this market except that the world is suddenly getting into it. It seems like the VNA and cloud market is averaging one new competitor every other week and already has at least two dozen providers vying for a piece of this pie. Now Merge it seems like is going to play in this marketplace too.

That is one of my biggest concerns- what exactly is Merge offering as a company? They already play in radiology, cardiology, and orthopedics markets and now with AMICAS they will enter into the healthcare IT market with VNA’s, financial, clinical trials, EMPI, perioperative, and many other areas. The vision expressed on the call was for Merge to either dominate the independent marketplace or compete with the bigger IT shops (all that is missing is a HIS), but neither makes much sense unless you believe that is part of Merge’s future. I’ll get to that in a bit.

Putting everything together in a single package is an admirable task but not nearly as easy to do as it sounds. As this strategy was being outlined to the Dalai and I all I could think about was that famous bus song the Hokey Pokey…

You put your right foot in,
You put your right foot out,
You put your right foot in
And you shake it all about.
You do the Hokey Pokey
And you turn yourself around,
That's what it's all about.

Of course you continue with your left foot, right hand, left hand, right shoulder, left shoulder, right hip, left hip and then your whole self in. One part at a time then you put it all together and jump in completely. That’s how Merge seems to address putting everything together- one part at a time- until their “whole self” was in .Maybe it was just my ADHD acting up but that’s all I could think about as they talked Of course instead of the Hokey Pokey I could have been thinking 99 Bottles of Beer on the Wall but I won’t go there.

I wouldn’t compare Merge to GE in any way, shape or form and while Merge may be a software company they lost a lot of good AMICAS software developers as well as sales people and others. I’m sure they will find all the engineers they need at “Bhopal Bob’s Developers and More” (BBDAM) but it still kinda sucks the way the guys were let go. Yes, they were offered a package after the fact, but it’s all about trust…and software engineers are very much like women- some may forgive but they NEVER EVER forget so in a situation like that it’s best to move on. Tiger, please take note…The logic of teamwork is also great when they are a team but with technology the way it is and everyone at Merge now Skyping, Webcasting and connecting remotely in various ways, all the engineers would have had to do is put on their orange ties, turn on the camera and voila- instant meeting! But alas, no sense crying over spilled milk. The kitties have no doubt lapped it up elsewhere which is a huge loss for Merge.

I’m also not sure I would compare what happened to AMICAS with Ben and Jerry’s getting bought up by Breyers (which happens to be owned by Unilever and makes everything from Lipton tea to Dove soap). Dalai, have you had Breyers lately? Yuck. Adding insult to injury they shrank their half gallon to 1.5 quarts and hoped no one noticed since they kept the price the same. Give me a full half gallon of Blue Bell, Ben and Jerrys, Haagen Dazs or even Publix Premium over Breyers any day. But alas, I digress.

Merge is the little engine that could that showed it can…at least in terms of pulling off the deal. My take on it is that the company has a much bigger vision of the future than what we are seeing and that AMICAS is merely a stepping stone.

The move of both companies to Chicago defied logic (why incur two expenses when one suffices?) but when you look at the long term picture it makes sense.

Mr. Ferro’s mentor on this deal was Glen Tullman who has been Allscripts CEO since 1997.

Merge also just added Jeff Surges, President of U.S. Sales for Allscripts Healthcare Solutions, Inc. to their Board of Directors.

Allscripts is based in Chicago. Merge just moved the headquarters to Chicago.

Allscripts currently offers clinical and healthcare solutions that address nearly every area EXCEPT those that Merge currently offers.

Lastly, Allscripts has dipped their toe in the PACS marketplace a few times already without any real success but still retains a keen interest in this market.

I found this comment from 5/13 Merge press release very interesting- "Jeff joins a group of business leaders who have worked hard on behalf of Merge with no cash compensation, and who have each personally invested in the company through common stock purchases." Re-read that again-“….business leaders who have worked hard on behalf of Merge… who have each personally invested in the company through common stock purchases.”(emphasis added). So these “business leaders” (plural), also have skin in the game…and when you have skin in the game the rules usually change. That’s MY money you are playing with, not just investors.

You connect the dots and come up with your own conclusions…I’m not saying anything other than it’s mere speculation but…since Merrick Ventures (Mr. Ferro’s company) now owns 36% of the common stock, 24% of the preferred (non-voting) stock and they seem to be getting a lot closer with a certain $3B IT company somebody stands poised to get very, very rich in the near term if all goes well. It ain’t me- and I seriously doubt it’s the Dalai either.

So the Dalai was right. It’s a very different company for sure. But if Merge can deliver on the vision as expressed everyone will be in pretty good shape, especially the PACS marketplace. Only time will tell.

The call from Merge finally came on Friday, a bit later than I would have expected, but then it seems I was never really visible on the Merge radar. But since I recently became a valued (and vocal) Merge customer, I was given a chance to speak with Nancy Koenig, now Executive VP of Direct Sales for Merge. One has to wonder if this was a lateral move for Ms. Koenig, who until recently was President of Merge Fusion. Is it better to be President of a division or EVP of a bigger division? In any case, she has risen steadily through the ranks, having started at Click with what is now the Merrick team . Also on the call was Kurt Hammond, whom I know very well from the AMICAS days. Kurt was involved in my initial AMICAS purchase, and I'm sure he'll be punished adequately for that. My friend Mike Cannavo, the One and Only PACSMan, was also in on the call. He covered financial issues, and you can expect his write-up shortly.

Let me say at the outset that I was very impressed by what I heard on this call. I come away with a far greater comfort level that AMICAS PACS will survive, and hopefully prosper. Clearly, the path it takes will be different than we would have seen had the Thoma Bravo deal gone through. The scope of its future will without question be larger than before, and I can only hope that the new trajectory is better than the old might have been. Only time will tell.

Ms. Koenig outlined a very ambitious course for Merge Healthcare. In essence, Merge plans to be a player, and a big one, in the health care IT market, with a fairly immediate goal of making imaging in general, and PACS in particular, part of the "meaningful use" aspect of the EHR. (My cynical translation: PACS users need to get the proper share of the EHR incentives as defined by the mainly GE-born CCHIT folks. We might as well!) The Merge acquisition of AMICAS is felt (by Merge at least) to be more of a merger (no pun intended) than a purchase. Ms. Koenig noted that Merrick Ventures has a history of taking swift action to turn the companies it acquires back to efficiency and profitability. They certainly did bring Merge itself back from death's door.

Merge wants ultimately to empower patients, giving them greater control (within reason!) over their own records, and its mission is to bring change to the field which will allow this to happen. The company plans to continue exploration into many areas such as billing, patient kiosks, and of course, remote access as demonstrated by Mobile eFilm.

But let's cut to the chase. Most of my readers are probably quite curious, if not altogether petrified, about the fate of AMICAS PACS, and so am I. There appears to be good news on this front. First and foremost, the go-forward product is to be AMICAS PACS. This certainly makes sense, as it is the flagship product of the company Merge just bought for $250 million. If you were to buy a PACS from Merge today, it would be AMICAS PACS Version Six, MR2.

But keep in mind, Merge now owns three separate and disparate PACS: AMICAS PACS, Emageon RadSuite, and Merge Fusion/eMed Matrix. (I'm going to be a snob and not count eFilm, which is a powerful but kludgy viewer with a rather primitive GUI, and not a PACS.) The plan for the future is to combine the best of all three into Version 7, which I guess will still be named AMICAS PACS, although I wouldn't be surprised to see it called Merge PACS. (I would strongly recommend dropping the names Fusion and Matrix.) From AMICAS will come the bulk of the GUI for this new product, with the Halo viewer that represents a small piece of my soul, as well as the Real Time Worklist, integrated mammography, and embedded 3D functionality. From Emageon will come the ECM, the Enterprise Content Management back-end, a Vendor Neutral Archive (VNA) which can handle Radiology or Cardiology, or any other 'ology, at least in theory. It was probably one of the main reasons AMICAS purchased Emageon. (If you look here, you will see the early forms of a hosted, offsite VNA, which could be the origins of a cloud PACS, and indeed Ms. Koenig told us Merge is pursuing something like this.) From Matrix comes instant messaging, and maybe a 64-bit architecture. Version 7 will be the upgrade path for customers of all three legacy PACS. So far, so good. When will Version 7 be released? Good question.

I was rude enough to point out GE's failure (as far as anyone can tell) in accomplishing the backend swap of Centricity Linux in hopes of using it with the IntegradWeb GUI, and I voiced fears of a similar disconnect when Merge actually attempts to graft AMICAS onto the Emageon ECM. Ms. Koenig's response? "GE is not a software company." This might be news to GE's PACS division in Chicago, and the good people at BDM, but I'll let them worry about that. Merge is definitely a software company.

The Merge Enterprise Master Patient Index will be incorporated into the product, although I'm not certain if this is to go with Version 7 immediately or not, which will pave the way for better enterprise integration across multiple sites, a federated hub and spoke system as Ms. Koenig called it.

Finally, let's talk about the elephant wearing the DOCTOR DALAI T-shirt in the corner, i.e., the loss of the AMICAS PACS developers and the fuss I made over this. Merge's philosophy about, shall we say, non-traditional office practices is quite clear. Companies can get too spread out, with too many people in too many places. For efficiency, people need to be brought back together, and should work in closer proximity. In other words, having developers in remote locations is not felt to be optimal. The unspoken followup is of course, that this is why the AMICAS developers were let go. Paradoxically, some of the V6 team working out of India will stay on, from India. Ms. Koenig acknowledged that Merge's developers would have to step into the roles, although she expressed confidence that this could take place. I thanked her for Merge's willingness to reverse their policy and offer my guys their jobs back on their own terms (although by that point it was too late).

I hope my friends will forgive me, but I offered up my services, and those of the old Advisory Board members who are willing to participate. From my point of view, this is a totally selfish and self-serving move on my part. I own and use an AMICAS PACS. It has to be supported and developed, or my investment of time and my partner's money will go down the drain, and my name will be mud (on a good day). For the sake of my patients, this product has to carry forth into the future. Have I sold my soul to Merge? Not bloody likely, but right now, their expressed aims are parallel to mine, and they are the best game in town. As I come to know the parties involved (I need to get to Chicago ASAP to meet them!) I hope to develop the same trust and admiration for them as I have for my friends from AMICAS, past and present. Merge, as run by Merrick Ventures, and Mr. Ferro's colleagues, will be a very different company than the AMMICAS I knew. Think Ben and Jerry's getting bought out by a big name like Breyer's. The ice cream might still be as good, and maybe even better, but the feeling is different.

If Merge can deliver on the vision as expressed by Ms. Koenig, we'll all be in pretty good shape. Time will tell.

Wednesday, May 12, 2010

Believe it or not, I usually don't like to get into the middle of a problem, especially someone else's problem. However, my very limited fame in the PACS realm seems to have created a lightning-rod effect of sorts. I've become the go-to guy for those who would need someone to look at their new product or idea, and I keep getting asked to join various boards and committees. As long as they don't ask for a membership fee, I'll help where I can. I'm reminded of this stanza from Fiddler on the Roof's"If I Were A Rich Man":

The most important men in town would come to fawn on me!
They would ask me to advise them,
Like a Solomon the Wise.
"If you please, Reb Tevye..."
"Pardon me, Reb Tevye..."
Posing problems that would cross a rabbi's eyes!
And it won't make one bit of difference if I answer right or wrong.
When you're rich, they think you really know!

When you declare yourself the Dalai Lama of PACS, I guess they think you really know, too. . .

One of the few things I do know is a bad situation when I hear about it.

Last October, I was invited to Australia to give a talk to some customers of healthinc, which distributes AMICAS in those parts. I was fortunate enough to meet some great people, radiologists and otherwise. Other folks who were not able to get to RANZCR started communicating with me via phone and email. (As an aside, I'll never get used to the time-zone difference and how it impairs telephone communication, and I'll never quite get over the fact that it's usually "tomorrow" for my friends on the other side of the world when I speak with them.)

The story I'm about to tell is true, and you may cringe when you hear the details I'm about to discuss. Those who related this tale of woe asked to remain anonymous, and so they shall. I've been in touch with quite a few of them, and my Skype bill reflects that, even at only a few cents per minute. These are physicians trying to care for their patients, and they should be lauded for stepping up and speaking out about what could be a really bad should it continue unabated.

I will endeavor to avoid pointing fingers at low level bureaucrats and IT types... Well, I said I would endeavor to avoid; I didn't say I wouldn't. . .

Australia is made up of a number of states, some quite large in territory, but small in population. New South Wales, which is where Sydney is to be found, has over 7 million citizens, and an area of 309,432 square miles. Texas, by comparison, has a population of about 25 million people, and an area of 262,000 square miles. Western Australia, wherein we find Perth, has a population of only 1.85 million souls spread over an area of 975,920 square miles. Population density is thus quite similar to Alaska which has 700,000 people spread over 572,000 square miles. (Figures from Wolfram-Alpha, if you were wondering.)

Australia's healthcare system is an interesting blend of public and private, partially socialized, if you will, and the people I met over there by and large are happy with their care. The public hospitals are run by the government, as you would expect, although there is a relatively larger number of outpatient imaging centers than seen here in the States, owned and run by radiologists or by private or corporate entities. I had the opportunity to visit a few of these in Sydney, and I found them quite efficiently run with equipment that would rival many hospital departments over here.

When the government runs things, the government RUNS things. We in the U.S. need to heed this simple fact. IT (being IT, and even more so when backed up by the government), tends to dig in its heels on certain things. When it was time for PACS selection around 2003, about the time I was getting into the business myself, the WA Department of Health selected Agfa as their vendor. As our hospital also found, Agfa at the time was the lesser of the evil "monolithic" PACS companies, and WA's IT types, just like ours, couldn't fathom going with a small company, as they might get bought out (rather prescient of them given the joys I'm now anticipating with AMICAS). In a familar scenario, the WA PACS control group made the selection without much input from the radiologists who would use the darn thing. The rads almost immediately took a dislike to the earlier iterations of Agfa, but they were told they would have to live with it, as a forklift upgrade to something else would be prohibitively expensive, and supposedly would take two years to accomplish even if it was approved, and there was no chance of that happening anyway. Requests to allow access to Intelerad installations, which most had in their private offices, were often rebuffed with the statement that "you already have PACS here, and that should suffice" even though the most widespread access within the hospitals utilized the elderly, slow, cantankerous, and basically unusable Agfa Web 1000 (may it never darken my screen again as long as I live!!!)

So, the radiologists lived with Agfa in the hospitals, but the vast majority went with Intelerad for their own private offices. Often, they loaded the InteleViewer client onto the Agfa workstations to provide access to their patients' data, and the programs coexisted peacefully. However, the IT folks were not amused with this cohabitation, and at some hospitals ultimately wiped the program off of the Agfa workstations, and blocked its reinstallation. Not to worry, the resourceful radiologists started carrying the software in on USB keys. So, naturally, Agfa support blocked the loading of the foreign PACS clients (sounds scary) from USB drives. Clever. The reason given, of course, was that the Intelerad software was crashing the Agfa computers (after a clean uneventful run of several years), and of course, the old tried-and-true excuse that loading extra software voids the warranty. I've looked into the latter, and it simply isn't true. The Agfa warranty (found here) says absolutely nothing about loading other software; you just aren't supposed to fool around with Agfa's programs. That's all. However, this is the U.S. version, and I'm told the Australian version might be more onerous. The rads at one hospital were threatened with disciplinary action should they be so foolish as to try loading their software again. What would IT do, take away Solitaire and Free Cell? Taking away their access to PACS would be a little over the top. But still, I must encourage everyone involved to follow the rules. Hospitals ultimately had to buy extra PC's to accomodate Intelerad and other clients for the private imaging providers.

As noted, the Western Australia PACS contract was awarded to Agfa 7 years ago, and the contract is up for renewal (or retendering as it is called down there) in 2013. In the meantime, the WA Department of Health's Health Information Network or HIN (which used to be called InfoHealth) recently awarded a contract to Agfa to create a statewide PACS and RIS, via restricted tender. There was apparently no competitive bidding, although I'm told some other vendors made the trip thinking they had a chance at this large project. The total value of the contract was $8,481,044 Australian (fixed price) (that’s $7,613,000 USD for those challenged in currency conversion).

And now, dear readers, comes the punchline to this walkabout. IMPAX 6.4 was installed a few weeks ago throughout Western Australia, in the "largest international rollout" of the product. (I wonder if the US is considered international to Agfa, a Belgian company.) The problem? Quite simply, it..um…didn’t quite work as expected...

I've received a litany of complaints the likes of which I wouldn't have believed had I not heard them from multiple sources. Perhaps the paramount complication is that the darn workstations crash. A lot. The entire system has had significant down time, often for several hours at a stretch. On occasion, the rads have had to read CT's directly off the console. One site reported a seven-day backlog in CT reporting.

Even when it works, (granted, the majority of the time), it is problematic. Some of the snags were rather severe with respect to patient care, such as images that don’t match patient names and/or records, and the occasional digital mammogram that was displayed with right and left reversed. More often than not, study lists don’t load previous cases in chronological order.

IMPAX 6 has a worklist that should automatically refresh, but sadly, it seems to crash a lot when refreshing, so the automatic function had to be disabled. This has resulted in a number of duplicate dictations as cases don't automatically disappear from the list after being read. The speech recognition system (I could have told them not to go there!!) has a bad habit of randomly rewinding to the beginning of a dictation, and then overwriting the report that was already 10 minutes in the making. Reports are lagging for days, even ED reporting which impacts patient care. The modality worklist is failing intermittently, forcing the technologists to manually enter patient demographics, one of the error-prone procedures PACS was supposed to eliminate. Training was abysmal to non-existent and on-site support equally lacking.

I was provided with a list of over 40 documented problems, and this number grows daily. All of the complaints describe problems I would consider quite serious including downtimes of four hours or longer. Keep Dalai's Laws of PACS in mind: PACS IS the radiology department, and when PACS is dead, so is the hospital.

The WA Health System is already under significant pressure. The PACS system over the last 2-3 years has become part of the problem, and certainly not part of the solution, and the recent troubles only make this worse. The workflow is incredibly clumsy compared with private practice PACS systems in WA. The Senior Consultant Radiologists, many of whom have worked with multiple different PACS systems in private settings, have found the system frustrating, and the majority of Consultant Surgeons and Physicians are equally underwhelmed at the efficiency of PACS. What once was a tool to improve efficiency throughout WA Health, has now become a stumbling block to most clinical pathways.

Out of all this comes one positive: The Impax 6.4 interface is a major improvement for remote viewing over groady old Web 1000.

One positive, and dozens of problems. As the kids say these days, OMG! This is unbelievable. Patient care is being negatively affected in a manner that is totally beyond belief. By the way, at least one hospital has had to declare a "Code Yellow" because of the PACS slowdowns; this means that the hospital has experienced a disaster and has had to stop accepting patients. Ouch. Keep this all in perspective. This isn't just one clinic or hospital with a cranky PACS. This is an entire state, and the problem affects multiple sites.

How did all this happen? I'm not sure I can answer that with certainty, and pointing the finger of blame isn't going to be useful at this late date. Suffice it to say that there might not have been enough planning, and that the vendor does not seem to have devoted adequate personnel to the job. Whatever the reason, the system is in place, and even a tsunami wouldn't budge it. So, it needs to be brought up to working status. Somehow.

Despite all the grief I give Agfa, or maybe because of it, our system is functional and is operational the vast majority of the time. I don't generally like the way it functions, but we do pump a tremendous number of studies through the darn thing every day. In other words, my Agfa hospitals are not having difficulties to the severity described above. Thus, we know the system can be made to work.

As the Western Australia upgrade to IMPAX 6.4 is brand new (they had IMPAX 5 before this that at least stayed up most of the time), there is only one entity that has the ability, and the obligation, to fix it, and that is Agfa. So, guys, fix it. Seriously. This is a very bad, very serious, and very dangerous situation. I'm putting out the pubic call to Agfa: Send whatever resources you must, send whomever you must (you can't have my Agfa PACS Goddess, but you can have me if I can help, and not somehoe end up mysteriously lost in the Outback), and send them quickly, please. Western Australia needs you now. Get this repaired before your reputation, and possibly patients, are further harmed. Do what you need to do.

I'll stay in touch with my friends Down Under, and I'll report back as soon as something changes. In the meantime, if you are in the market for a PACS, this is probably another vendor that you should watch. And by that I mean wait and see how this is handled before deciding to go forward with this vendor, if they should happen to be on your short list. Funny, I said the same thing just a week ago concerning AMICAS as well and I’m only at the beginning of the alphabet. First AMICAS, now Agfa.

Caveat emptor, eh? But that, of course, as well as everything else I write, is only my humble opinion.

Fair Dinkum.

Addendum...

It seems the games have begun. From one of my friends Down Under comes this note:

As a strange “coincidence”, look what now comes up when you try to access your blog site from inside the public hospital system. This was not there last week.

Typically, it does not work properly, blocking some of the graphics, search tools, header, blog list, etc, but the article text still renders.

Access to the web site you requested has been restricted

The site you have attempted to access has been identified as inappropriate or unrelated to Department of Health business. All Internet access is recorded and regularly reviewed by Department of Health accountability personnel.

If you require access to this site for Department of Health business, please contact your line manager to request access. All requests for access to this site will be reviewed by the State Health Executive Forum.

For a copy of the 'Acceptable use of Computing Facilities' policy please click here.

Saturday, May 08, 2010

Watching my kids use their MacBooks was just too much for me. I had to return from the Dark Side and buy one for myself. I held out until Apple announced the new MacBook Pro models with the newer Intel processors, and then took the plunge. I've been very pleased with my new baby so far. Loading Windows 7 (sigh) was a breeze using the included Boot Camp software, and I was able to get AMICAS versions 5 and 6, and even IMPAX 6 (sigh again) running without difficulty. Who says you can't have your cake and eat it too?

While the new i7 MacBook Pro has lots of stuff on it, the one thing it lacks is an SD card reader, although for some strange reason they chose to include an Express 34 slot. Not to worry, for $15, (with shipping from Hong Kong, which took less than a week) one can get an SD adapter for the Express 34 slot, which makes this slot useful for me, and I suspect most others. Here's what I got from eBay:

It pops right through the aluminum spring-hinged door and seats nicely, looking almost like it was born there. Problem solved.

Anyway, my venerable Precision M90 now needs a home, and I need the revenue to help pay for the new MacBook. This was a screamer in its day (I bought it from the Dell Refurb site three years ago) with Core Duo 2.33GHz processor, 4GB of RAM, 100GB hard disk spinning at 7200 RPM, wireless card, Bluetooth card, 17" WUXGA screen, nVidea Quadro FX 2500M video card, etc. It comes with Windows XP Pro loaded on the cleanly wiped disk. (Sorry guys, no secret porn stashes or corporate secrets are to be found, not that there ever were any...) I had just extended the warranty out to 2012 when the new Macs appeared.

Thursday, May 06, 2010

Here's Mike Cannavo's final opus on the topic. Now we can all get back to work.

Dr. Dalai and I listened in to the Merge 1st quarter earnings call. We were having fun furiously sending e-mails back and forth (probably should have just IM'd each other) wondering about some of the comments made. What I heard didn’t exactly install complete confidence in the future of the companies. But the Dalai is right- it’s time to move on. But while he’s moving on, I’m Movin’ Out. After I finished the call Billy’s Joel’s Movin Out came on the radio in my office and the lyrics hit me-

It seems such a waste of time

If that's what it's all about

If that's movin' up then i'm movin' out.

What this deal is all about is dollars- I have said that time and again. If Merge makes it with the debt they have incurred, it will be a miracle second only to loaves and fishes and might even overtake that too (Sorry JC- take it up with me after I die). Twenty three million dollars in annual interest payments is a pretty big nut to crack considering AMICAS lost money again and Merge didn’t exactly set the world on fire even when you factor in some of the costs for the AMICAS acquisition. That’s about $6M per quarter just to keep the lights on – but we’ll just have to see.

Merge has to cut costs- no one will debate that- but I support Dalai saying that slicing and dicing the AMICAS R&D team just wasn’t the smartest way to save a buck. But what’s done is done. The development team said adios trusting Merge like Elin trusts Tiger.

If you watch the video interview on http://www.businesspov.com/article/322, you will note at around the 1:50 mark the goal set forth by Mr. Ferro back in 2008: to bring Merge from the brink of death where it was (at $0.28/share) to become at least a $500M company. Can he do it with the AMICAS purchase? Perhaps. He’s about a third of the way there with Merge having a market cap of just under $177M as of today, more than tripling the value of the company since he took it over back in 2008. But not all of his investments for Merge seemed have panned out so far. According to the web site http://markets.ft.com/ft/tearsheets/businessProfile.asp?s=MRGE:NMQ the the value of Merge stock after the $20M purchase of eTrials Worldwide last July declined just over 19%, while the value of Merge stock after the purchase of Confirma, Inc purchased in September 2009 for $22M declined just over 35%. Merge stock hasn’t exactly skyrocketed since the AMICAS purchase was announced last week either, going from a high of $2.67/share to a low of $2.33 and closing at $2.35 yesterday. Again I know nothing about the financial world but one would at least think that there would be a wee bit more excitement over Merge becoming the largest independent PACS player in the marketplace than this chart reflects….and starts with the day after the announcement that the deal was officially made:

Now today the stock shot up like a meteor after the press conference hitting as high as $2.46 before tumbling down to $2.29 and settling close to yesterdays $2.35 close as I write this but that’s the nature of the beast.

Do I trust Merge to do the right thing? Spike Lee I’m not so all I can do is hope and pray. They seemed to hide a lot on the call- I loved the pregnant pause when an investor pushed them for details on who they bought recently for a little over $1M (Docusys) when it was obvious they didn’t want to disclose this information for whatever reason. I also loved how they danced around earnings for Confirma and eTrials (“We don’t break those out” was their answer). I think the investor just wanted to know how the $42M invested in both companies was working out- and based on the answer (or lack thereof) it seems like it’s not. And when I heard the words on the call “payable at our discretion” the hair on the back of my heard stood up, but alas I am not a financier so….what do I know?

So we now have an invite to go to Chicago. I feel like the guy who got a wedding announcement after the wedding and reception already took place with someone just looking for a gift. That is why my son didn’t send out graduation announcements- it’s a tacky way of saying “Hey, me some send money!!) (It’s hard to believe my oldest is going to graduate this year. Seems like just yesterday that he…)

I wish Messrs Ferro, Dearborn and others at Merge had contacted us sooner. We would have been able to help them better. Lord knows we tried- hard- and to no avail. But as I tell my kids, life is about the decision you make- and those you don’t. I wont send a gift or a card until Merge reaches its first year anniversary post AMICAS, but like the Dalai will be there to counsel them if they need it. After all, we are all in this game together…Merge obviously has the need to know what is going on in the PACS arena from the customer standpoint, and who better than the Dalai and I to guide them?

The leadership at Merge is run by brilliant entrepreneurs- men much younger and more financially savvy than the Dalai and I- and believe it or not we really do want you to succeed. The Dalai and I live in the PACS world- it occupies a large part of our lives. We know PACS. Use us. And before the cynics come on here thinking I’m pining for a large PACS consulting contract with Merge know that is not the case or anywhere near it. The Dalai and I both have offered to provide all sorts of input to the new company for free- yes, FREE. Just pick up the phone and call us…

Know that offer still stands. Merge stands on the precipice of being either a zero or a hero. All it takes is a single call...or two….

The Merge First Quarter Earnings Call takes place in a few moments. I'm probably not going to be on it, as I'm not an investor. Well, I am an investor in an AMICAS PACS system, making me a customer, and an investor of sorts, but that may not count. And besides, I have to do some barium enemas and upper GI's this morning. The patients come first.

Let me bring everyone up to date. I've been in touch with several members of the old AMICAS team, people that I have come to know and trust over the years, people who know and trust me. It seems that many, if not most, were offered their positions back under their terms (working remotely, for example) at 4PM yesterday. I would like to think that Merge realized the truth in what I have been saying, hopefully from within and not due to the postings of one lone average radiologist. Sadly, this comes after too much water under the bridge. My friends as a man (gender-neutrally speaking) declined the offer. I asked them point blank if anything could reverse this decision. They again said, "No." There had been too much acrimonious discussion leading up to the offer, and everyone concerned had more or less decided it was time to move on. And so they shall, as I understand it. I'm sure they will all live long and prosper.

As for me and my AMICAS systems (we have two, my group owns one, and the hospital owns the other), I'm going to sit tight. We all know in this business that it is impossible to switch from one vendor to another without considerable pain and suffering, not to mention a huge expenditure. Merge has finally reached out to me and other members of the (now defunct, I guess) Medical Advisory Board, and wants to meet with us to outline its plans for the future of AMICAS PACS. They have even invited Mike Cannavo, the One and Only PACSMan to come up as well. (We're wondering if he and I should bring food tasters...just kidding.) While I can't personally make it to Chicago any time soon, I'll be in touch by phone, and I will listen, and contribute where I can. We customers are, for the moment, a captive audience, and I can only hope that Merge will do what I was promised it will do, continue to support and develop AMICAS PACS. I'm sure they will try to do so, although the loss of pretty much everyone who built this software from the ground up is a terriffic blow to this effort.

I am going to be cautiously optimistic. What else can I do? We have to move on. I'll let you know how it goes. And I'll be looking very, very carefully at the rest of the market.

By the way, I just got this comment from Anonymous (of course!):

Dr. Dalai: I think you should find the time to go visit Merge. They've reached out to you, albeit belatedly, and I think you should reach back. Also, I think you should try to convince some of your Amicas friends to come back. After all, if you care about the quality of the product as much as you claim, it behooves you to do so.

I will make the trip when my schedule allows, and I'm in touch in the meantime. As far as convincing anyone to return, I've really gone way far out on a limb on that, more than you guys will ever know. I've done what I can do. Funny how it's now my responsibility in the mind of Anonymous at least to do so.

I should add something else. I don't want to be the center of attention, believe it or not. I'm a generally shy fellow, and I don't like conflict very much. I inserted myself into this fray to preserve a product that I firmly believe helps me help my patients. That's all I want out of the whole thing. Hopefully, my fifteen minutes of fame has now passed, and we can get back to business.

Wednesday, May 05, 2010

I'm an AMICAS customer. Moreover, I'm a fan. I'm a member of their Medical Advisory Board. I helped develop their latest GUI, Version 6, affectionately known as AMICAS PACS. I believe in this product, and the people who created it, which explains my fervor, and my dismay at even the possibility of its loss.

Looking back over the recent posts on the topic of the Merge takeover, I have to ask myself what I want to accomplish. The answer is simple: I want to preserve the AMICAS I knew. That's it.

Much of what Mike and I have published here reflects our trepidation at the manner in which Merge collected the funds to make the purchase. One has to remember the old Merge to understand this. Before the arrival of the current management/ownership team, Merge was approaching bankruptcy. There were some brushes with the SEC over a former CFO filing "materially false and misleading financial statements in the company's annual report on Form 10-K for the fiscal years ended Dec. 31, 2002, Dec. 31, 2003 and Dec. 31, 2004, and in the company's quarterly reports on Form 10-Q for the first three quarters of fiscal year 2005." But that's old news. Merge has reached the point that even in this day of tight loan money, they were able to score the $250 Million to buy AMICAS. Can you say "leveraged"? Seriously, though, we have to look more closely at the team that made this happen.

Merge was rescued from bankruptcy, oblivion, and irrelevance by Merrick Ventures, a venture cap firm that goes beyond most you've heard about over the years. Merrick is run by a gentleman named Michael Ferro, whom we have mentioned before. But just who is he and how does Merrick operate? From the Merrick site:

Ummmm, well, I certainly can't argue with success, and Mr. Ferro's track-record with Click is nothing short of phenomenal. And here's something we don't often see in this setting: this entrepreneur gives back to his community of Chicago:

Mr. Ferro is a Director on the Board of Trustees of The Chicago Museum of Science and Industry, The Field Museum of Chicago, The Joffrey Ballet of Chicago, Northwestern University and the Lyric Opera of Chicago. He serves on the boards of Northwestern University, The Chicago Community Trust, Children’s Memorial Hospital, Northwestern Memorial Foundation, Big Shoulders Foundation, and AfterSchool Matters. In addition to his civic and philanthropic activities, Mr. Ferro participates in several business organizations. He is the chairman of the Chicagoland Entrepreneurial Center and a board member of the Economic Club of Chicago. Mr. Ferro is also a member of Young Presidents’ Organization and The Commercial Club of Chicago. He is a graduate of the University of Illinois.

This list speaks to the contribution of a lot of time, and a lot of money. OK, I'm impressed. And humbled to some degree, as I can't imagine being involved in that many activities. I can barely balance work and my honey-do list. This side of the man is far from the stereotypical money guy. And, the Merrick philosophy carries this benevolence forward, with a very strong capitalistic attitude that gets the attention of us conservatives, acerbic like me or not.

Merrick embraces the ideas of Benjamin Franklin, Milton Friedman and Daniel H. Burnham. Merrick desires to fundamentally affect the outcome of the significant economic and social transformation our country is currently undergoing. America's greatest competitive strength is its unique ability to take advantage of the commercial, political and entrepreneurial freedoms founded in the United States.

Merrick offers an industrious and ambassadorial environment where our companies can thrive in a culture that promotes the responsibility of leaders to pursue philanthropy and economic endeavors to the benefit of both individuals and the community.

Benjamin Franklin discerned the keys to making America great and posted many words of wisdom in his Poor Richards Almanac. Franklin's sentiment that, "So much for Industry, my Friends, and Attention to one's own Business; but to these we must add Frugality, if we would make our Industry more certainly successful," applies equally to entrepreneurs and business leaders today as it did to the people of 1757.

As Milton Friedman said in 1962, "If an exchange between two parties is voluntary, it will not take place unless both believe they will benefit from it. Most economic fallacies derive from the neglect of this simple insight, from the tendency to assume that there is a fixed pie that one party can only gain at the expense of another." Merrick creates a synergistic amalgamation of proven business leaders and philanthropists who are dedicated to helping build emerging capitalists interested in centralizing their corporate endeavors in Chicago.

We offer our entrepreneurs and companies the same sage advice as Daniel H. Burnham bestowed upon us in 1911 when Chicago was being built. "Make no little plans; they have no magic to stir men's blood and probably themselves will not be realized. Make big plans; aim high in hope and work, remembering that a noble, logical diagram once recorded will not die, but long after we are gone be a living thing, asserting itself with ever-growing insistence. Remember that our sons and our grandsons are going to do things that would stagger us. Let your watchword be order and your beacon beauty."

The views, ideals and prophecies of the great influential capitalist leaders of America's history provide the fundamental values and intellectual guidance for the principles and values of Merrick.

For what it's worth, Mr. Ferro and Merrick have donated to a number of political candidates, mostly Republican, but also to a few Democrats here and there. Notably, there was no contribution to Chicago's favorite son that I could find, and I heartily approve of that omission.

Mr. Ferro was interviewed in late 2008 by the entrepreneurship website BusinessPov, which refers to him as "Tenacity Man". (I couldn't embed the video here, so you'll have to view it on the linked page.) This five minute clip tells us more than any biography. I've transcribed the key passages below, but you have to watch the clip to get a feel for how he thinks.

When asked, "what was your first mistake as an entrepreneur?" Mr. Ferro responded: "Growing too fast, not having the infrastructure in place, not understanding checks and balances, and thinking you can do it all. That was probably my first mistake. I still make that mistake many times, but we try to eliminate it as much as possible. And not having good mentors around. When I first got started, I was just relying on my own gut instinct, and that's not enough to build a good company."

Merrick had just purchased Merge prior to the interview. Ferro noted: "We own half of a public health company called Merge health care in Milwaukee which we just bought 100 days ago. That company has almost tripled in value since we did the deal. It was beaten down. They were a company worth a billion dollars three years ago. They spent $80 Million in the last 16 months, they just burned through their cash. We were able to buy the company for a very very low amount to take a controlling stake in it. It's a company worth $50 or $60 million dollars and it used to be worth a billion. Can we make it worth $500 million in the next three years? That's our goal and we think we can."

Again, watch the whole thing. Five minutes well-spent.

The other fellow in the equation is Justin Dearborn, the Merge CEO. From Forbes:

Justin C. Dearborn served as managing director and general counsel of Merrick Ventures, LLC (with its operating entities and affiliates, are referred to collectively to as 'Merrick Ventures') from January 2007 until his appointment as Chief Executive Officer of the Company on June 4, 2008. Mr. Dearborn has diverse experience in operational, financial and legal roles. Prior to joining Merrick, Mr. Dearborn worked over nine years for Click Commerce, Inc. (which we refer to as 'Click Commerce'), a publicly traded software and services company that was acquired by Illinois Tool Works Inc. in October 2006. From May 2003 until May, 2005, Mr. Dearborn served as vice president of Corporate Legal Affairs and Human Resources at Click Commerce. Mr. Dearborn was appointed corporate secretary of Click Commerce on May 2, 2003. Prior to Click Commerce, Mr. Dearborn worked at Motorola, Inc. where he specialized in intellectual property transactions and also held management positions in Motorola's Semiconductor and Corporate Groups. Mr. Dearborn and holds a B.A. from Illinois State University and a J.D. from DePaul University. He has practiced law in the state of Illinois but no longer holds a license to practice law. Mr. Dearborn has served on our Board since his appointment as Chief Executive Officer of the Company on June 4, 2008.

I couldn't score a list of Mr. Dearborn's charitable activities, but at only age 39, I'm not expecting quite the same exhaustive list.

Before I wrap it up, let's look at Mr. Ferro's answer to the question, "What makes a good entrepreneur?"

Entrepreneurs who are willing to take direction are entrepreneurs who will succeed. That's my number one issue with most entrepreneurs. They say they want to come in, but what they really want is money and leads which I appreciate. That's what 99% want when they come to a meeting: 'Can you get me into this company or can you give me money?' And that's sweet and nice and I get it, I was there. But . . . if you don't take direction, and you are not willing to be humble and willing to have have humility and have rhino skin, you know, if you aren't thick skinned, you are going to fail. If you can't do that, if you can't take the help that people want to give, and listen, I understand it's hard, but somebody who can actually take it, thats what the guys out there are looking for, the men and women out there who have money and time and experience, they want people who will take their advice; it's OK, you don't have to take it all. . .

The question is, will Mr. Ferro, if he's even aware of me and my rantings here on the blog, take even a little of my advice?

I have said before and I'll say again that the AMICAS acquisition was an incredible piece of business strategy, probably the greatest coup ever in the PACS world. Being a physician, with stereotypically poor business sense, I have tremendous respect for those who made this happen. (Those who know me well will confirm the sincerity of that statement. I do not play games or kiss backside, especially in a public venue such as this.)

Merge has wasted no time in streamlining the AMICAS operation, which is a nice way of saying they got rid of a lot of people. I realize that this is often what happens when one company takes over another. My advice to you, Mr. Ferro and Mr. Dearborn, is to reverse that decimation to the degree still feasible. Many of the good people that were let go have already landed in other positions. That says a great deal about their expertise and quality, given the economic situation of today. Others are "on hold" for the moment. Many of them are the heart and soul of AMICAS. They ARE AMICAS. They are what you bought with the company, and you need them. In particular, please reconsider the dismissal of the Version 6 development team. You may have excellent coders at your disposal who can reconstruct the programming, but not soul of the software. I know these people; they are very, very good at what they do. They built what you bought. They understand the program, and they understand me and what I need.

I am not a businessman, but I am a physician, a radiologist. I have been in private practice for 20 years, and I have worked with PACS for 17 of those years. I know PACS from the user's standpoint. The company you bought, the PACS you bought, helps me take care of patients, and they are the most important consideration. I need your software to do my job well. Trust me, give me the honor of mentoring you, take advantage of my expertise. You spoke of infrastructure . . . AMICAS had the infrastructure in place to build upon, and that infrastructure was its people. Don't take that away. Merge is now the largest of the "small" PACS companies, and I do think you can grow it back to the half-billion mark, with a little luck and a lot of work. All you need is the right people behind you. You know where to find them.

Monday, May 03, 2010

This blog has received more hits today than any other in its five year history. I guess there is some significant interest in the demise of AMICAS.

I've received a great deal of additional information as well. Some of this I have been asked not to publish, as it would reveal the identity of the sender, and so you won't be seeing it here. Bide your time, it will all come out in the end.

One reader informs us of changes in the structure as well as the physical locations of Merge, changed as of yesterday. His/her information is incomplete, but you will get the idea:

Restructured to functionality-based, so there are no longer divisions (Merge Fusion, Merge OEM & Merge CAD are now just Merge)

Raleigh (Merge eTrials) not sure. I think that this operation DOES remain a separate division.

Washington (eko) not sure if this office even existed. The technology was acquired, but I'm not sure if any people/facilities were included.

Mississauga (Toronto suburb) stays open

[Toronto (eFilm) already closed in 2005]

My friend continues:

"In conclusion, there appear to be 3 development centers remaining open. Toronto, Hartland and Daytona Beach. Some (maybe even all?) people are being offered the chance to relocate, but I'm not sure what personality type would relocate from Seattle (or Boston) to Milwaukee. The Daytona Beach office no longer has any R&D, though it may have been gone from there for a while already. The Washington office is gone. Also Cedara's old Shanghai office is still open.

R&D will have one senior VP R&D with 4 VPs reporting to her to cover the R&D operation which is split between Toronto and Hartland. All 5 of those VPs are in Toronto, so the center of control is clear. However, I've heard that the Confirma employees (or at least some of them) have been offered jobs in Hartland, rather than Toronto (paperwork is easier I suppose). Apparently the regulatory person at Confirma becomes VP regulatory, and will move.

Still it seems that offering to move people from the coast (Seattle, Boston, Daytona Beach, Washington, Birmingham) to Hartland (or even Toronto) is not an offer that most people would take.

Oh, by the way. . . the ties are orange and will be provided by the company. The suits must be blue or at least dark. However, suits and ties are required only when meeting with customers."

That sounds much better. My sources managed to smuggle out a photo of the new Merge orange tie:

Sunday, May 02, 2010

Mike Cannavo and I called it, so it seems. I now greatly fear the demise of AMICAS as we knew it, and it only took Merge about 12 hours to get the process started. My sources from deep within AMICAS, at many levels, are telling me things that scare me to death.

First, let's have an understanding on something. This is information given to me by people who are devastated by recent events. These are people who have been with AMICAS for years, people who love the company and put heart and soul into its products. These people ARE AMICAS. It is their proficiency that went for $250 Million, not a few disks of code. It was on the backs of these people and their expertise that the AMICAS stockholders collected an extra few bucks. Any attempt to punishing them (and there are quite a few) for contacting me would absolutely destroy whatever is left of the environment that built AMICAS into what it is. Or what it was.

I'm not providing any scoops here, as HISTalk has already begun to report the carnage:

From BestofBreed: “Re: Merge Healthcare. Laid off 80+ people Friday.” I heard that from more than one reader. The Amicas acquisition closed Wednesday, so they obviously didn’t waste any time addressing redundant positions. Steamin’ Pyle says rumor has is it that no years-based severance was offered to the expungees, meaning nobody is supposed to get it in the future.

A number of sources have told me of changes beginning on Thursday, the day after the Merge purchase was complete. Basically, the new owners have decided to impose the culture of the victor upon their spoils. I have heard the following, and yes, this is heresay as I was not present in the room to verify these items:

Headquarters for the new Merge(d) operation will move to Chicago

Research and development will move to Toronto (more accurately to the Merge/Cedara offices in Mississauga, Ontario)

Support will remain in Daytona, Florida

"Remote" employees are not part of the Merge approach. Those who must operate away from HQ are to keep in touch at all times via Skype

Employees are to wear suits and peach colored ties

The staff that is kept on will move to Chicago or Toronto as appropriate. Those who don't agree to make the move by next week will have essentially resigned from AMICAS/Merge.

Six of the eight primary developers of AMICAS PACS (Version 6) are already gone

An update for AMICAS PACS (MR2) could not be released as planned as the QA staff is no longer working for AMICAS

Let's look at some recent history:

GE purchased Dynamic Imaging in October of 2007. There have been glorious announcements of the assimilation of the IntegradWeb GUI into Centricity, with the laughable marketing tactic of quoting high KLAS ratings for DI under the GE name. To date, almost three years later, there has not been a fully-functional installation of the hybrid product. One good PACS gone with the wind.

Philips purchased Stentor in 2005. To date, almost five years later, there has not been a significant upgrade.

Our new friend Merge's Fusion PACS is a rebadged eMed Matrix PACS, which came with the purchase of Cedara (which bought eMed in 2004). There have been some integral improvements over the years, although no major new release has come forth.

I had hoped the purchase of AMICAS, which was clearly made to acquire its PACS, would be different. Merge is justifiably proud of this new bauble, displaying it prominently on its website. If you drill down a little, you can even find a quote from yours truly on those pages.

But as I've said earlier, AMICAS is nothing more or less than the sum of its PEOPLE. $250 Million does not buy a pile of code, nor a lease on an office, nor a cute logo (I preferred the old green amoeba, personally), and it certainly does not buy the loyalty of the customers like me. It is supposed to buy the genius, the expertise, the good will, the soul of the company. Perhaps no single employee is indispensable, but en masse, the employees ARE the company. To impose onerous rules and draconian practices which are certain to drive off most of the folks that survived the first cut is simply ignoring the gem just purchased. It's like a kid at Christmas more enamored with the box than the expensive toy inside.

I have tremendous respect for the financial prowess of Messrs. Ferro and Dearborn. This purchase was one of the great moves in PACS history. You guys certainly know your way around business. However, you DON'T understand PACS like I do. My patients' lives depend on your software. Literally. From all appearances, you are in the process of dismantling the team that created it, apparently thinking that one bunch of IT guys is pretty much the same as another. If this were true, why did you buy AMICAS in the first place? You MUST recognize, before it's too late, that your new company needs its people to survive and to thrive. Please do what it takes to keep them on. If the New Merge is to prosper, to flourish as the largest small PACS company (i.e., not GE, Fuji, Philips, McKesson, et. al.), and to someday grow to a billion dollar enterprise, then you must make the best use of your $250 Million investment in the people of AMICAS. Discarding them like the old AMICAS stationery makes no sense at all. Bottom line is this: your actions are destroying AMICAS. If you don't reverse what you are doing, you have just flushed $250 million down the toilet. Don't do it to yourselves, don't do it to the AMICAS people, and don't do it to me and the other AMICAS customers.

A former Emageon employee reminds me as well that these Merge lay-offs and the AMICAS situation also included many decent and hard-working former Emageon and Camtronics employees whose efforts should not be forgotten.

I've been in touch with several members of the AMICAS Medical Advisory Board, and we are deeply concerned about the future of AMICAS PACS. I expect (and demand) that the existing product will be maintained for the foreseeable future. But without the AMICAS team behind it, the software will languish. I would not be expecting a Version 7 for many, many years to come.

And if anyone should ask me whether or not to buy AMICAS PACS now, given the events of the past few days, well, do I even need to say it?

First quarter earnings results for Merge will be published before the earnings call. The public web cast will follow at 8:30 AM EDT. Investors can listen to the conference call live via telephone or over the Internet at Merge Healthcare Web Cast. To access the call via phone, investors can dial 800.221.2015 (US and Canada) or 706.634.2159 (International). The Conference ID Number to reference is 71224037. A replay via the Internet or telephone will be available shortly after the call at http://www.merge.com/investor/conferencecall.asp.

I'll see you there.

--------------ADDENDUM---------------

Dalai's note: Here' Mike Cannavo's take... I'll let him have the final word...

Being a good parent means providing guidance for your kids without doing it for them, giving advice when they ask (and sometimes even when they don’t), being there to celebrate when they succeed and providing them with an ear to listen and shoulder to cry on when they fail. A good parent never ever says I told you so- but then I’m not your daddy so “I told you so.”

The Dalai and I have had a lot of concern about this deal and it seems rightfully so. I wrote a piece titled “Wall Street” nearly two months ago that the Dalai published and this “deal” has played out just like the movie. Greed is good, screw the little guy, screw the end users. So much from Wall Street has come into play in the past 48 hours:

Carl Fox: No, a prophecy. The rich been doing it to the poor since the beginning of time. The only difference between the Pyramids and the Empire State Building is the Egyptians didn't allow unions. I know what this guy is all about, greed. He don't give a damn about Bluestar or the unions. He's in and out for the buck and he don't take prisoners.

Substitute AMCAS for Bluestar and there you have it….It’s all about money…You want heart and soul? Put on some Hoagy Carmichael because Merge has no heart and the AMICAS stockholders sold their soul to the devil for 15%. Fifteen freaking percent…but it wasn’t even not even that much because you had to factor out the $8.6M they paid Thoma Bravo to take a hike, so there’s another $0.23 or so off the top….plus commissions plus….Bravo would have been a better deal…and left the company alone as well…

The Dalai I have shed more blood and tears over this deal than we wanted to and subjected ourselves to ridicule from many inside and outside the industry….. trying to save a company from what we felt was sure disaster…yet in the end the only statement that mattered was this one….

So if the rumor mill is correct, and we are both pretty sure it is given our industry contacts, AMICAS as we knew it is no more. RIP AMICAS 1996-2010. And that is such a pity…

The Dalai and I feel like Carl Fox did talking with his son Bud…

Carl Fox: He's using you, kid. He's got your prick in his back pocket, but you're too blind to see it.

Bud Fox: No. What I see is a jealous old machinist who can't stand the fact that his son has become more successful than he has!

Carl Fox: What you see is a guy who never measured a man's success by the size of his WALLET!

Bud Fox: That's because you never had the GUTS to go out into the world and stake your own claim!

[Long Pause]

Carl Fox: Boy, if that's the way you feel, I must have done a really lousy job as a father.

The size of his wallet….that’s what matters. Megalomania rules Merge now- move or become unemployed, we beat the drum, you march to it or march out the door. Thanks for everything…and for nothing. You are ours….

So who wins? Mr. Ferro and company of course. Congratulations on a very very well played game…Seriously- you done good for yourself and your financial buddies. How good might take a while but I’m sure we’ll all see what the price on the soul of the company was worth to you all. Who loses? The 500 or so AMICAS end users, the PACS marketplace, the 80 or so people whose blood, sweat, and tears made AMICAS what it is…or at least was…

Gecko’s speech to the stockholders is the embodiment of what is wrong with the new Merge because they believe it…or at least leadership seems to…

Gordon Gekko: …….The new law of evolution in corporate America seems to be survival of the unfittest. Well, in my book you either do it right or you get eliminated…... I am not a destroyer of companies. I am a liberator of them! The point is, ladies and gentleman, that greed, for lack of a better word, is good. Greed is right, greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. Greed, in all of its forms; greed for life, for money, for love, knowledge has marked the upward surge of mankind. And greed, you mark my words, will not only save Teldar Paper, but that other malfunctioning corporation called the USA. Thank you very much.

I see how well it saved AMICAS- just like Merge got “saved” by creative financing as we watched a $28.00 share stock tumble down to $0.28. Watch closely people- the slice and dice comes next…First we slice and dice the people….and then the parts of the company.

Read back to the Dalai’s blog- March 10- Since You (Never ) Asked-

Both companies also can’t sustain dual ongoing research and development costs, dual sales forces and management teams, offices in two geographically diverse locations, etc. As soon as AMICAS bought Emageon the reality of consolidation hit the people at Emageon hard and heavy. I would venture to say the same will hold true here with AMICAS unless, and this is a very real possibility, that Merge already has a buyer lined up for some or all of AMICAS’ offerings. I would tend to say this is more than a distinct possibility, but then what do I know…..This also just what the economy needs- more people out of work- and just what I need too- more out of work sales reps playing PACS consultant until they can find a real job.

You can also read back to my first post on March 1st titled Wall Street. More of the same prophecies… Just call me Notstra-freaking-damous…I have wonder how many AMICAS stockholders really read it…or of they did if they cared enough about the company rather than their pocketbook…

Gordon Gekko: Because it's WRECKABLE, all right? I took another look at it and I changed my mind!

Perhaps we can be a bit more direct to the AMICAS team as Gecko was :

Gordon Gekko: Well you take it, right in the a$$ you scumbag c*cksucker.

The Dalai and I relate more to Bud Fox’s dad Lou than anyone else in the company because we still have our integrity. But one has to ask not just what Merge was thinking, because they had a plan all along, but did AMICAS management as well? Did they have any choice at alll? It will all come out in the end because unlike AMICAS now Merge is still publicly traded. As the plane was going down did some get parachutes while others resolved themselves to meeting their Maker sooner than later? We’ll see..but if they did God help them…It was best said in the movie…

Carl Fox: I don't go to bed with no whore, and I don't wake up with no whore. That's how I live with myself. I don't know how you do it.

The Dalai has the right idea- get on Thursday’s Merge call. I plan on being there as well. Hell I might even “invest” in one share of Merge stock so I can be a shareholder too and have an unheard voice…..just as the AMICAS shareholders did…

One last thing. An “earnings” call? On a Thursday? Let me tell you how it generally works. If you had a good quarter your earnings calls are early in the week. If you have a bad quarter or have some creative explanations for a bad quarter then your call is held at the end of the week. I’ll be keenly listening this Thursday.

Gordon Gekko: I don't throw darts at a board. I bet on sure things. Read Sun-tzu, The Art of War. Every battle is won before it is ever fought.